Courage Capital Management LLC

Item 5: Fees and Compensation
The Adviser and/or Funds’ general partner charges fees comprised of two components:
one based on a percentage of assets under management (the “Management Fee”) and

the other based on performance or capital appreciation (the “Performance
Compensation”). The Funds’ general partners share in the Management Fee and/or
Performance Compensation based upon agreements with each Fund and Adviser.

Management Fees

The Management Fees are generally charged in advance on a quarterly basis at the
annual rate of between 1.00% and 2.00%. The Management Fees are calculated
separately for each Fund as set forth in its offering documents, including committed
capital, invested capital, and/or net assets. In certain circumstances, the Management
Fee is negotiated. If a Fund is established during a quarter or a client makes an addition
to its account, the Management Fee will be charged as of the effective date of the
investment advisory agreement or the date of the contribution and will be prorated for the
number of days remaining in the quarter.

Certain investors that are employees, business associates and other “friends and family”
of the Adviser, its affiliates or their personnel (“Adviser Investors”) will not typically pay
Advisory Fees in connection with their investment. Notwithstanding that Adviser Investors
will generally not pay Advisory Fees, Adviser Investors will generally pay for their pro rata
share of certain Fund expenses.

Performance Compensation

The Performance Compensation is charged or reallocated between 15% and 20% of the
net profit attributable to each Fund investor, subject to either a loss carry-forward
adjustment or a preferred return. The Performance Compensation is generally payable
either (i) for the Special Situations Funds, at the end of each calendar year but is payable
more frequently if provided for in the investment advisory agreement, or (ii) for the Credit
Funds, Music Funds, Natural Resources Fund, and Healthcare Fund, following the return
to investors of all capital contributions plus a preferred return. To the extent the Adviser
is entitled to Performance Compensation upon the sale or deemed realization of illiquid
investments, the Adviser has an incentive to delay or accelerate the realization of an illiquid
investment. In addition, depending on the particular private investment fund, Courage
receives performance-based compensation on unrealized appreciation as well as realized
gains in assets. Performance Compensation is charged or reallocated in compliance with
Rule 205-3 under the Investment Advisers Act of 1940, as amended.

Upon proper instruction by the Fund or its representative, the Management Fee and/or
Performance Compensation are deducted from the Funds and the Adviser. In certain
situations, the Fund’s general partner is paid.

Upon termination of investment advisory services, any unpaid portion of Management
Fees or Performance Compensation will be determined and due on a pro-rata basis. Any
unearned portion of a fee paid in advance will be refunded on a pro-rata basis.

The Management Fee and/or Performance Compensation described above could be
waived or reduced with regard to Fund investors that are members, principals, employees
or affiliates of Courage, relatives of such persons, charitable organizations and for certain

strategic or initial investors. In certain circumstances, fees may be individually negotiated
by Fund investors.

Management Fee Offset

The Music Funds’ general partner, the Adviser, the Music Funds, or any of their respective
affiliates may retain or employ senior advisors or consultants (“Senior Advisors”) who are
engaged in the music business for a portion of their time, including those primarily to
provide services relating to investment identification, acquisition, other due diligence,
holding, improvement, optimization, disposition or similar services to the Music Funds,
any alternative investment vehicle or any portfolio holding or prospective portfolio holding
of the Music Funds or any alternative investment vehicle. Any compensation, including
fees, Performance Compensation (if any), and any reimbursement of travel and other
costs and expenses, received by Senior Advisors may be paid by a portfolio holding or
prospective portfolio holding (which payments will not offset the Management Fee paid to
the Music Funds’ general partner) or directly by the Music Funds.

To the extent the general partners of the Music Funds, Credit Funds, Healthcare Fund,
and/or Natural Resources Fund earn or receive any directors fees, consulting fees,
advisory fees, management fees, transaction fees, closing fees, monitoring fees or break-
up fees from a portfolio company in connection with its investment activities (collectively,
“Transaction Fees”), the Management Fees payable with respect to all future periods
during the term of the Music Funds, Credit Funds, Healthcare Fund, and/or Natural
Resources Fund will be offset by an amount equal to one hundred percent (100%) of
those Transaction Fees. For the avoidance of doubt, if the Music Funds, Credit Funds,
Healthcare Fund, and/or Natural Resources Fund and one or more other clients of the
general partners have made an investment in a transaction producing Transaction Fees
(or were pursuing the investment in the case of unconsummated transactions), then only
the portion of the fee that is fairly allocable to the Music Funds, Credit Funds, Healthcare
Fund, and/or Natural Resources Fund based on the nature of the transaction giving rise
to the fee will be included in the Management Fee offset described above. In addition, to
the extent that any Transaction Fees include any in-kind payment in assets other than
cash, the general partner shall value the in-kind payment as of the date received, and in
accordance with its valuation policies and procedures for the Music Funds, Credit Funds,
Healthcare Fund, and/or Natural Resources Fund.

Other Fund Expenses
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Item 7: Types of Clients
The types of clients to whom the Adviser generally provides investment advice are private
pooled investment funds and a charitable organization. Investors in the Funds may
include, but are not limited to, individuals, public and private pension plans, charitable
foundations, endowments, trusts, funds of funds and other institutional investors.

Any client that is a pooled investment fund will have a minimum investment level as stated
in a Funds’ offering memorandum, however, such minimums could be waived for certain
investors.